As consumers shop on new insurance marketplaces for the health plan that best meets their needs, an innovative tool, launched by the National Health Council (NHC) and powered by Avalere Health analytics, helps consumers calculate their estimated out-of-pocket costs.
PuttingPatientsFirst.net uses a personalized out-of-pocket cost calculator and patient scenarios to explain how individuals’ costs can vary under different plan designs. The tool goes beyond federal and state exchange websites, which do not include an out-of-pocket calculator, by allowing consumers to understand how premiums and benefit design combine to impact their total healthcare costs. Results underscore previous Avalere Health research findings that out-of-pocket spending can vary dramatically based on the plan selected on the marketplace.
For example, one scenario shows that out-of-pocket spending (including deductibles and cost-sharing) for someone with a chronic disease could vary by more than 600 percent based on plan selection. When combined with real marketplace premiums for the same person, total spending under a bronze plan could be more than double that under a platinum plan.
“How much consumers spend on healthcare is a result of a variety of factors, not just premiums,” said Caroline Pearson, vice president at Avalere. “Many people shopping on the marketplace might be better off with a bronze or silver plan, but a single accident or unexpected illness could make a gold or platinum plan a better deal. The Putting Patients First® platform begins to help consumers sort through the critical tradeoff between premiums and out-of-pocket costs.”
Even people who are relatively healthy face the same tradeoff on the marketplace. Another sample scenario on PuttingPatientsFirst.net shows how expected out-of-pocket costs under a bronze plan for a relatively healthy individual could climb from $160 to $6,350 as a result of an accident. While the premium for a platinum plan is nearly double that for a bronze plan for the same individual, total costs after an accident would be 25 percent lower under the platinum option. This scenario underscores the complexity that consumers face when selecting a marketplace plan and highlights the importance of balancing tolerance for risk and ability to absorb unexpected costs with the desire for lower premiums.
Premiums on PuttingPatientsFirst.net are based on actual marketplace premiums for non-tobacco users in select rating regions and do not take into account potential eligibility for the advance premium tax credit. Plan design data were collected primarily from Summary of Benefits and Coverage (SBC) documents posted publicly. Utilization management techniques such as visit limits, prior authorization, and step therapy are not included in the estimates, and in-network utilization is assumed. The cost of medical services was estimated using the Medical Expenditure Panel Survey (MEPS) for 2011. Medicare Part D tier placement is used as a proxy for marketplace formulary design, and medication costs were calculated based off Average Wholesale Price (AWP).
Avalere Health is a strategic advisory company whose core purpose is to create innovative solutions to complex healthcare problems. Based in Washington, D.C., the firm delivers actionable insights, business intelligence tools and custom analytics for leaders in healthcare business and policy. Avalere’s experts span 180 staff drawn from Fortune 500 healthcare companies, the federal government (e.g., CMS, OMB, CBO and the Congress), top consultancies and nonprofits. The firm offers deep substance on the full range of healthcare business issues affecting the Fortune 500 healthcare companies. Avalere’s focus on strategy is supported by a rigorous, in-house analytic research group that uses public and private data to generate quantitative insight. Through events, publications and interactive programs, Avalere insights are accessible to a broad range of customers. For more information, visit avalere.com, or follow us on Twitter @avalerehealth.